Beyond the Internet, Innovation Struggles

Alphabet (née Google) shows the limits of technological advances in moving the needle on productivity

Google’s decision to separate its profitable businesses from its money-losing “moonshot” ventures has offered a window into why American productivity is struggling despite so much exciting technological innovation.

The things at which Google and its peers excel, from Internet search to mobile software, are changing how we work, play and communicate, yet have had little discernible macroeconomic impact. Productivity—the goods and services a worker produces in an hour—grew just 0.4% per year over the past five years, one of...